The latter ("services") part of chief executive Steve Ballmer's vision reflects on a broader industry-wide trend. While onerous to offline users, increasing connectivity has allowed companies like Adobe System Inc. (ADBE) to transition their software portfolios to subscription services. Advantages of this approach include the ability to provide licensed customers with universal access, the removal of user troubleshooting, and the ability to quickly deliver updates/improvements/patches.

Microsoft CEO Steve Ballmer [Image Source: Bloomberg]

The former ("devices") is more unique to Microsoft. Like Apple, Inc. (AAPL) or Google Inc. (GOOG), Microsoft has found that its software experience has granted it the vision to design products that in some ways are more appealing than those of primarily hardware firms like Dell, Inc. (DELL) or Hewlett-Packard Comp. (HPQ).

Microsoft's efforts are a hybrid of Apple and Google's. Unlike Google, it does not contract third party OEMs for its branded products; but unlike Apple it does not lock out third-party designs. Like Google, the Microsoft-branded devices seek to illustrate the company's vision for hardware-software integration for a specific operating system release, while like Apple they're designed to raise the bar on quality over baser OEM fodder.
With that in mind, the shift is also motivated -- to an extent -- by the desire for self-preservation. Some shareholders have called for Mr. Ballmer to step down due to Microsoft's recent stumbles and low share prices. But Mr. Ballmer still has some leverage -- he's served as CEO for almost a decade and a half and has the blessing of Chairman Bill Gates who founded the company. Bill Gates chose to anoint Mr. Ballmer as the company's new leader, and that makes displacing him difficult -- to say the least.

With a shakeup, Mr. Ballmer can use that leverage to hang onto his top position, showing investors he's willing to change the formula when the fit is poor.

Windows President Steven Sinofsky was the company's most prominent executive ousting to date. [Image Source: ExtremeTech]

A source says the upcoming changes are designed to shake up the ranks of Microsoft's young guns and restore the kind of management that propelled the company to success in the 1990s. Comments the source to All Things D, "It feels like it is going to be titanic — that Steve is doing this change for his legacy. And it’s the first time in a long time that it feels like that there will be some major shifts, including some departures."

Among those who the sources say may be either promoted -- or on the flip side kicked off the ship -- include Satya Nadella, president of Microsoft’s Servers and Tools division; Tony Bates, president of its Skype communications unit; and Don Mattrick, president of its Interactive Entertainment division (which includes the Xbox business); Qi Lu, president of Microsoft’s Online Services unit; and CVP Terry Myerson, who runs the company’s Windows Phone division.

The big question is whether the changes -- ranging from the creation of new positions to firings to shuffling -- will be announced before, after, or at Microsoft's annual BUILD Conference for developers, which runs this week from June 26 to 28.

You are overplaying Unix and underplaying MS in the server market. Almost every company has MS servers. Some have Unix/Linux in addition to run certain things and some larger corps have other specific purpose driven servers, but MS owns it by far, by a huge margin and isnt going anywhere any time soon.